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Sunday, February 26, 2017

doctrine of judicial restraint.=whether FIR and the consequential proceedings alleging non-compoundable offences could be quashed by the High Court in exercise of its jurisdiction under Section 482 of Cr.P.C. on the basis of the settlement arrived at between the complainant and the respondents-accused.= we see no reason to differ with the view taken in Manoj Sharma’s case (supra) and several decisions of this Court delivered thereafter with respect to the doctrine of judicial restraint. In concluding hereinabove, we are not unmindful of the view recorded in the decisions cited at the Bar that depending on the attendant facts, continuance of the criminal proceedings, after a compromise has been arrived at between the complainant and the accused, would amount to abuse of process of Court and an exercise in futility since the trial would be prolonged and ultimately, it may end in a decision which may be of no consequence to any of the parties. In view of the discussion we made in the preceding paragraphs, in our opinion, it would be proper to keep the said point of law open. However, in the given facts, we dismiss this appeal.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.396 OF 2017
                 (Arising out of SLP(Crl.) No.1010 of 2012)

Central Bureau of Investigation   …          Appellant(s)
                                  :Versus:
Sadhu Ram Singla & Ors.           ...        Respondent(s)



                               J U D G M E N T

Pinaki Chandra Ghose, J.

Leave granted.
This appeal, by special leave, has been filed  assailing  the  judgment  and
order dated 2nd June, 2011 passed by the High Court of  Punjab  and  Haryana
at Chandigarh in Criminal Miscellaneous No.M-2829 of 2011, whereby the  High
Court while relying upon another judgment of the same High Court and on  the
basis of settlement of dispute, quashed  the  criminal  proceedings  against
the  respondents,  being  FIR  No.SIA-2001-E-0006  dated  28.12.2001   under
Sections 420 and 471 of Indian Penal Code [in short  ‘IPC’],  registered  at
Police Station, SIU(X)/SPE/CBI,  New  Delhi  and  the  criminal  proceedings
pending in the Court of learned Special Judicial  Magistrate,  CBI,  Punjab,
Patiala.

Brief facts of the case are as follows:  M/s.  Rom  Industries  Ltd.,  Mansa
Road, Bhatinda (Punjab),  which  is  respondent  No.3  herein,  (hereinafter
referred to as the “respondent-company”) was  dealing  with  State  Bank  of
Patiala, Bhatinda (City) Branch (for short “the Bank”) since  1976  and  was
availing the credit limits from a consortium  of  banks  with  the  Bank  as
leader and enjoyed total fund based credit limits from  the  banking  system
to an extent of Rs.31,500.00 lacs in  March,  1996.  However,  in  the  year
1996, due to destruction of stocks consisting of  Deolided  Cakes  lying  at
Bedi Port, Jamnagar in a cyclone storm  that  hit  Bedi  Port,  Jamnagar  on
19/20 June, 1996,  it claimed to have suffered heavy loss to the  extent  of
Rs.38.08 crores. The destruction of stocks could not be corroborated by  any
evidence. The respondent-company had been granted credit facilities  against
hypothecation of stocks  which  included  stocks  lying  at  the  port.  But
allegedly after Bank verification of the  stocks,  it  was  found  that  the
respondent-company had fraudulently obtained higher  credit  limits  on  the
basis of stock statements which appeared forged and false.  The  respondent-
company approached the Bank for grant of adhoc export packing  credit  limit
of Rs.10 crores in February 1995, which was sanctioned on 09.03.1995.

Law was set into motion when FIR  No.SIA-2001-E-0006  dated  28.12.2001  was
registered  at  Police  Station,  SIU(X)/SPE/CBI,  New  Delhi,  by  Shri  K.
Balachandran, Chief Vigilance Officer of the State  Bank  of  Patiala  under
Section 120-B read with Sections 420, 467, 468 and 471 of IPC,  against  the
Board of Directors including respondent Nos.1 & 2.  Charge-sheet  was  filed
before the learned  Special  Judicial,  Magistrate,  CBI,  Patiala,  Punjab,
against the respondents under Section 420/471 read with  Section  120(B)  of
IPC, for having entered into criminal conspiracy between 1995  to  1996  and
causing loss to State Bank of Patiala to the  extent  of  Rs.28.49/-  crores
through false stock statements, forged bank guarantee and  dishonest  misuse
of funds generated.

During the pendency of the proceedings before the Court of  learned  Special
Judicial Magistrate, CBI, Patiala,  Punjab,  a  compromise  was  arrived  at
between the Bank and the respondent-company  under  a  One  Time  Settlement
scheme of the Bank, through which sums of Rs.6  crores  and  Rs.1.25  crores
were deposited by the respondents and acknowledged by the Bank  vide  letter
dated  11.11.2009.  Thereafter  the  Bank  released   the   securities   and
guarantees of the respondents, withdrew the recovery proceeding  pending  in
the DRT and stated vide the aforesaid letter dated 11.11.2009  that  nothing
was  due  from  the  respondents  to  the  Bank.  An  application  filed  by
respondent No.1 for compounding of offences under  Section  320(2)  of  IPC,
was dismissed by the Trial Court on the ground that Section  471  read  with
468 of IPC is a non-compoundable offence.

Thereafter, the respondents approached the High Court,  invoking  its  power
under Section 482 of the Criminal Procedure Code, 1973 (in  short  ‘Cr.P.C.)
for quashing FIR No.SIA-2001-E-0006 dated 28.12.2001 and also the  resultant
proceedings  pending  before  the  Court   of   learned   Special   Judicial
Magistrate, CBI, Patiala, Punjab, on the basis of aforesaid settlement.  The
High Court by its judgment dated 2nd June, 2011, relied on  its  Full  Bench
judgment in the case of Kulwinder Singh & Ors. Vs.  State  of  Punjab  Anr.,
2007 (4) CTC 769, and on the basis of settlement  of  dispute,  quashed  the
criminal proceedings against the respondents.

The question which arises before us is no longer res  integra  i.e.  whether
FIR and the consequential  proceedings  alleging  non-compoundable  offences
could be quashed by the High Court in exercise  of  its  jurisdiction  under
Section 482 of Cr.P.C. on the basis of the  settlement  arrived  at  between
the complainant and the respondents-accused. Since the  question  before  us
revolves around clause 9 of Section 320 of Cr.P.C., the same  is  reproduced
herein as follows:
“320. Compounding of offences.-
(1)   xxx        xxx        xxx
(9) No offence shall be compounded except as provided by this section.”


We have heard learned Additional Solicitor General  appearing  for  the  CBI
and learned senior counsel appearing  for  the  respondents  at  length  and
carefully examined the materials  placed  on  record.  We  have  also  taken
notice of the fact that the counsel for the  appellant  in  High  Court  had
sought time for filing the reply but no reply was filed. We have also  taken
notice of the fact that the High Court  while  quashing  the  said  FIR  and
consequential proceedings, has relied on the Full  Bench  judgment  of  that
High Court in the case of Kulwinder Singh & Ors Vs. State of Punjab &  Anr.,
2007 (4) CTC 769, in which reliance was placed on the judgment delivered  by
this Court in the  case  of  Mrs.  Shakuntala  Sawhney  Vs.  Mrs.  Kaushalya
Sawhney & Ors., (1980) 1 SCC 63.

Learned Additional Solicitor General appearing for the  CBI  has  drawn  our
attention to the decision of this Court in Manoj Sharma Vs.  State  &  Ors.,
(2008) 16 SCC 1, wherein it was observed by this Court:

“22.  Since  Section  320  CrPC  has  clearly  stated  which  offences   are
compoundable and which are not, the High Court or even this Court would  not
ordinarily be justified in doing something indirectly  which  could  not  be
done directly. Even otherwise, it  ordinarily  would  not  be  a  legitimate
exercise of judicial power under Article 226 of the  Constitution  or  under
Section 482  CrPC  to  direct  doing  something  which  CrPC  has  expressly
prohibited. Section 320(9) CrPC expressly states that no  offence  shall  be
compounded except as provided by that Section.  Hence,  in  my  opinion,  it
would ordinarily not be a legitimate exercise of judicial  power  to  direct
compounding of a non-compoundable offence.”


We further wish to supply emphasis on the judgment delivered by  this  Court
in the case of State of Tamil Nadu Vs. R. Vasanthi Stanley & Anr., (2016)  1
SCC 376, wherein it was observed:
“15. As far as the load on  the  criminal  justice  dispensation  system  is
concerned it has an insegregable nexus with speedy trial. A  grave  criminal
offence or serious economic offence or for that matter the offence that  has
the  potentiality  to  create  a  dent  in  the  financial  health  of   the
institutions, is not to be quashed on the ground  that  there  is  delay  in
trial or the principle that when the matter has been settled  it  should  be
quashed to avoid the load on the system. That can  never  be  an  acceptable
principle or parameter, for that would amount to destroying the  stem  cells
of law and order in many a realm and further strengthen the marrows  of  the
unscrupulous litigations. Such a situation should never be conceived of.”


Further reliance was placed on the decision of this Court  in  the  case  of
Central Bureau of Investigation Vs. A. Ravishankar Prasad & Ors.,  (2009)  6
SCC 351, wherein it was held:
“39. Careful analysis of  all  these  judgments  clearly  reveals  that  the
exercise  of  inherent  powers  would  entirely  depend  on  the  facts  and
circumstances of each case. The object of incorporating inherent  powers  in
the Code is to prevent abuse of the process of the court or to  secure  ends
of justice.”


Lastly, reliance was placed upon another judgment of this Court  in  Central
Bureau of Investigation Vs. Maninder Singh, (2016) 1  SCC  389,  wherein  it
was held by this Court:
“19. In this case, the  High  Court  while  exercising  its  inherent  power
ignored all the facts viz. the impact of the offence, the use of  the  State
machinery to keep the matter pending for so  many  years  coupled  with  the
fraudulent  conduct  of  the   respondent.   Considering   the   facts   and
circumstances of the case at hand in the light of  the  decision  in  Vikram
Anantrai Doshi case, (2014) 15 SCC 29, the order of the  High  Court  cannot
be sustained.”


Resisting the aforesaid  submissions  it  was  canvassed  by  Mr.  Bishwajit
Bhattacharya, learned senior counsel  appearing  for  the  respondents  that
High  Court  has  judiciously  and  rightly   considered   the   facts   and
circumstances of the present case. Relying upon the judgment of  this  Court
in Gian Singh Vs. State of Punjab & Anr., (2012) 10 SCC 303, learned  senior
counsel appearing for the respondents strenuously urged  that  the  offences
in the present case are not heinous offences. He further drew our  attention
towards the relevant part of Full  Bench  judgment  of  the  High  Court  in
Kulwinder Singh & Ors. Vs.  State  of  Punjab  &  Anr.  (supra),  which  was
reproduced in the impugned judgment and the same is reproduced hereunder:
“26. In Mrs. Shakuntala Sawhney v. Mrs. Kaushalya Sawhney  &  Ors.,(1980)  1
SCC 63, Hon'ble Krishna Iyer, J. aptly summed up the essence  of  compromise
in the following words :-

The finest hour  of  justice  arrives  propitiously  when  parties,  despite
falling apart, bury the hatchet and weave a sense of fellowship or reunion.

27. The power to do complete justice is the very essence of  every  judicial
justice dispensation system. It cannot be diluted by  distorted  perceptions
and is not a slave to anything; except to the  caution  and  circumspection,
the standards of which the  Court  sets  before  it,  in  exercise  of  such
plenary and unfettered power inherently  vested  in  it  while  donning  the
cloak of compassion to achieve the ends of justice. No embargo,  be  in  the
shape of Section 320(9) of the Cr.P.C.  or any other such  curtailment,  can
whittle down the power under Section 482 of the Cr.P.C.”


Since the  present  case  pertains  to  the  crucial  doctrine  of  judicial
restraint, we are of the considered opinion that encroaching into the  right
of the other organ of the government would  tantamount  clear  violation  of
the rule of law which is one of the basic structure of the  Constitution  of
India. We wish to supply emphasis on para 21  of  the  Manoj  Sharma’s  case
(supra) which is as follows:
“21. Ordinarily, we would have agreed with Mr. B.B. Singh. The  doctrine  of
judicial restraint which has been emphasised repeatedly by this  Court  e.g.
in Aravali Golf Club v.  Chander Hass (2008) 1 SCC 683 and Govt. of A.P.  v.
P. Laxmi Devi (2008) 4 SCC 720, restricts the power of the  Court  and  does
not permit  the  Court  to  ordinarily  encroach  into  the  legislative  or
executive domain. As observed by this Court in the  above  decisions,  there
is a broad separation of powers in the Constitution  and  it  would  not  be
proper for one organ of the State to encroach into  the  domain  of  another
organ.”


Having carefully considered the singular  facts  and  circumstances  of  the
present case, and also the law  relating  to  the  continuance  of  criminal
cases where the complainant and the accused had  settled  their  differences
and had arrived at an amicable arrangement, we see no reason to differ  with
the view taken in Manoj Sharma’s case (supra) and several decisions of  this
Court  delivered  thereafter  with  respect  to  the  doctrine  of  judicial
restraint. In concluding hereinabove, we  are  not  unmindful  of  the  view
recorded in the decisions cited at the Bar that depending on  the  attendant
facts, continuance of the criminal proceedings, after a compromise has  been
arrived at between the complainant and the accused, would  amount  to  abuse
of process of Court and an exercise in futility since  the  trial  would  be
prolonged and ultimately, it may end in  a  decision  which  may  be  of  no
consequence to any of the parties.

In view of the discussion we  made  in  the  preceding  paragraphs,  in  our
opinion, it would be proper to keep the said point of  law  open.   However,
in the given facts, we dismiss this appeal.



……..………………………J
                                             (Pinaki Chandra Ghose)


……..………………………J
                                             (Amitava Roy)
New Delhi;
February 23, 2017.

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